Apple’s momentum at risk with the legal battle against Samsung – Image Courtesy Apple
In a very real way, it must suck to be Apple. It prides itself in being an innovative company, in changing the way people think about computing, about phone communications and about mobile computing and communications. There is a price to be paid by being ahead of the pack. That price is eventually the rest of the pack will catch up to you. That is just part of economic competition. That is just part of the evolution of the market. Apple is no stranger to competition catching up to it in terms of its innovations. The most famous previous example where Apple was swamped by its competition involved the rise of Microsoft Windows. Apple for all intents and purposes, like it or not, put the graphical user interface solidly into the commercial sphere. While it is true that other companies have come up with a GUI before Apple, the launch of the Mac fully commercialized the GUI and computing has dramatically changed ever since.
Chalk it up to corporate pride or hubris, but Apple turned around and sued Microsoft when Microsoft came up with its own GUI. The question that was brought to the courts was whether this was illegal copying or can totally independent companies come up with a product that looks somewhat similar because the functions are similar? This means if the features that cannot be patented or copyrighted constitute key elements of a product and they come together in a certain look and feel, can a company that has legal rights to a certain look and feel sue a competitor that came up with similar but exact look and feel? This was the big question in those lawsuits and Apple lost big. The end result was Apple was relegated to a niche computing product and Apple spent some time as an also-ran company until it experienced a Renaissance with Steve Jobs’ re-installment as CEO and the rise of the iPod, iPhone and iPad, which did not only put Apple back in the game but made it the dominant player not just in the text space but as the top dog of corporate valuations the world over. In fact, Apple is worth more than many oil companies. It is the most valuable company in terms of market capitalization in the whole world. Naturally, Apple would want to protect the dominant position it has had with its iPhone product line. In fact, iPhone was really its breakout product that helped it completely dominate the competition. It is the largest single brand of phone in the smart phone market. Of course, Android, the operating system, is the dominant OS in the smart phone market, but when it comes to single-brand product, Apple owns that market.
It appears that Apple is feeling the competitive pressure because Android is a free operating system and the iOS is not. It is a closed proprietary operating system. This is a big disadvantage to Apple because cheaper and cheaper hardware can flood the market and they just need to use the Android free OS. This could easily turn into yet another repeat of Apple’s experience in the computing space where because it lost the Windows GUI fight, cheaper clones flooded the market running the Windows Operating System. As a result, Apple computers became a fraction of the computer market. Can the same thing happen with the smart phone space? Apple has a lot riding on its lawsuit with Samsung. Once again, Apple is claiming that Samsung basically just copied its design from the Apple iPhone. Since the iPhone is Apple’s massive cash cow with a relatively huge profit margin, this is a high stakes lawsuit. Make no mistake about it. This is less a battle between Apple and Samsung and more of a battle between Apple and Google. Because if Google Android wins out this legal battle, there is a strong chance that much cheaper players would flood the market with cheaper handsets with more features and the smart phone market might quickly devolve into a race to the bottom. This is exactly the last thing Apple needs because it is commanding a nice profit premium just because a phone has the iOS and has the Apple logo. That is serious business folks.
As part of its case, Apple released three image comparisons that compared Samsung handsets from 2005 all the way to 2012. It showed the evolution of Samsung handsets from clunky Nokia-like units to units that began to closely have features that resembled the iPhone’s features. It is interesting to see the difference between the i700 handset released in March 2004 and the Galaxy S II released in October 2011. It is a total sea change. You have the i700 where the main area is compromised of its buttons and keys and a small display, and the Galaxy S II which has a touch screen and a graphical menu courtesy of Google Android. The question this comparison chart though is sure, Samsung’s products look like they evolved quite a bit in a span of six years, but does this really rise to the level of illegal copying? I am sure other handset makers that started incorporating Google Android moved to a touch pad look and feel. It goes with the territory because that is what Google Android does. It is a touch screen OS. Naturally your hardware would be a touch screen. In terms of the design, maybe the issue should be with Apple and Google in regard to how the buttons are laid out and how the functionalities are laid out. In terms of just hardware, we are sure that the fans is probably thinking that what Apple is trying to do is like blaming a car maker for rolling out a car that has four wheels. This is a question of functionality and design and the basic rule of design is that form must always follow function. One of the easiest ways to fail in design is when function follows form.
It should be very interesting to see if Apple’s lawsuit results in a big verdict for Apple. If it does, then it cements Apple’s market leadership and slows down Google Android’s domination of the smart phone OS market. If it fails, then all bets are off and it is going to be a question whether Apple repeats its previous history or it innovates its way into new product categories. It still remains to be seen whether Apple can continue to revolutionize consumer categories on a decade by decade basis or does it just stick to its guns and protect what it already has.